Published on the 02/09/2026 | Written by Heather Wright

Professor targets platform giants’ structural advantage…

The debate over regulating big tech has largely focused on competition law, privacy breaches and social media harms. But University of Auckland professor Susan Watson says policymakers may be looking in the wrong place. Instead of focusing on the behaviour of technology giants, she says regulators may need to tackle a deeper issue: The structure of the corporations themselves.

Watson, Professor of Law at the University of Auckland Business School, says companies such as Amazon, Meta and Google no longer compete within markets. Instead they own essential digital infrastructure, control platforms on which people and businesses depend, and set the rules for operating within them.

“We have the opportunity perhaps to be bold within our own jurisdiction.”

She told iStart some platform operators hold a structural advantage because they both control the infrastructure on which markets operate and compete within those same markets, citing Amazon as an example.

“”They operate as the platform where people sell goods. And also, of course, Amazon itself is one of the players that sells goods on the platform,” Watson says. “That gives Amazon a big advantage because it both holds the infrastructure of the platform and is also one of the enterprises selling on it.”

She compared the situation to New Zealand’s ongoing debate over gentailers, where electricity companies both generate and sell power.

“It’s that same issue around how can you have a platform that’s fair for everyone when you have some players that are structurally advantages.”

Rather than relying solely on conventional competition measures, Watson says policymakers should consider structural remedies.

Changing the corporate

She says corporations are often misunderstood as essentially private businesses, when in fact they are legal entities, created and empowered by states. That misunderstanding has helped obscure the source of big tech’s power and contributed to the failure to rein it in.

“The sort of difference that would really shift what is happening is saying you need to look at the corporations themselves. One obvious way that you could reduce the power of these big platform corporations is that you could disaggregate where they are vertically integrated.”

“If they’re both the virtual infrastructure and a participant in the market, maybe we just say, ‘well, you can’t do that,” she says.

She goes further, suggesting platform operators may eventually need to choose between running the infrastructure and competing on it. “You’re going to be a platform or you’re going to participate on a platform – a corporation can no longer do both.”

But a broader way of thinking is to look at what we give to corporations when we enable people to incorporate them, she says.

Very large corporations such as the platforms ‘can create new types of capital and lay a claim on it in a way that regulators struggle to stop then doing’ she notes. “If you think about technology, they’ve done that with data – no one realised or claimed data because they perhaps didn’t see the value of it. But big tech corporations are essentially turning data into capital by recognising that data allows us to predict people’s behaviour, and that has value.”

She says that’s one example of what could be regulated against. Another option would be once platform corporations reach a certain size they have different requirements placed on them.

The proposal reflects broader arguments in Watson’s paper Reining in Big Tech Corporations: Why Platform Governance Requires Structural Regulation, which contends that platform corporations increasingly control essential digital infrastructure and should not be viewed simply as conventional market participants. She draws comparisons between the East India company and rail and oil companies of the Gilded Age in the late 19th century and today’s big tech. The paper will form part of a Cambridge University Press collection.

While many Gilded Age companies were broken up by antitrust laws, that involves the jurisdiction the company is based in taking action – something that she admits is unlikely to happen with large US-based companies.

Getting ahead of the problem

While critics argue stronger regulation risks stifling innovation, Watson says the challenge is developing targeted responses rather than broad-brush interventions.

“I always think it’s like a scalpel, not a sledgehammer.”

Regulation should focus on specific risks and structural characteristics, rather than applying restrictions across all large corporations.

Locally, she suggests Australia and New Zealand need to get better at predicting proactively, rather than reactively, the impact big tech behaviour might have, in order to consider whether precautionary approaches are needed before harms emerge.

“What always seems to happen with regulation is it happens after the harm has happened,” Watson says, citing the classing example of actions to prevent children using social media.

“We need to proactively think about, for example AI, and how might we predict what’s going to happen and then proactively prevent some sorts of activity within our jurisdictions.”

She acknowledges the answers won’t be easy.

“The only thing we could do is regulate activities of have platform corporations in our own jurisdictions that reach a certain size, or apply pressure on the international corporations as we are now with regulating social media, saying if you don’t do these things, we will in some way control access to our jurisdictions for your corporation.”

The discussion also has implications for New Zealand’s media sector.

Asked about suggestions social media advertising revenue sold into New Zealand could be levied with that funding used to support public-interest journalism, Watson says: “On the face of it, yes.”

The A/NZ opportunity

More broadly, she notes that major technology companies actively lobby against legislation they believe could affect their interests.

“It was interesting when they proposed the social media ban in New Zealand that Meta sent down a very senior official,” she says. “They will work actively to lobby against legislation that they think will harm their interests.”

Watson says New Zealand’s size should not automatically be viewed as a disadvantage. She points to the country’s history of leading on policy issues and argues smaller nations can still shape global debates – a factor that may have prompted Meta’s sending of that official. “Why do they care about little old New Zealand? Well it’s actually more likely that you’ll get that type of legislation in New Zealand than you will in the US or the big jurisdictions,” she says.

“We have the opportunity perhaps to be bold within our own jurisdiction and that might have some influence over other jurisdictions,” she says.

For business leaders, the central message is awareness.

Big Tech platforms deliver enormous benefits and are deeply embedded in modern commerce. But, Watson argues, their growing role as both infrastructure providers and market participants means businesses, policymakers and regulators need to think beyond traditional competition rules.

“If we could see them, they’re enormous forces,” she said.

The question, she argues, is no longer whether platform corporations are powerful. It is whether regulatory frameworks built for traditional corporations are still adequate when a handful of companies increasingly control the infrastructure of the digital economy.